Tough break, Brett (and the rest of us)

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Gerry Faulhaber" <gerry-faulhaber () mchsi com>
Date: February 25, 2009 10:01:20 PM EST
To: <dave () farber net>
Subject: Re: [IP] Re:   Tough break, Brett (and the rest of us)

Dave [for IP if you wish]

Brett and I had correspondence on the Linkline case a few months  
back.  He believes passionately that a monopoly, even an unregulated  
one, can be guilty of an antitrust violation if they do not provide  
wholesale service at a "reasonable" price, under the "essential  
facilities doctrine."  My view is that the essential facilities  
doctrine is no longer an antitrust doctrine at all, and the vertical  
price squeeze antitrust argument makes no sense if the monopolist does  
not have a duty to deal with the customer.  In the Linkline case, the  
monopoly has no duty to deal, thus the price squeeze argument has no  
validity.  In my correspondence with Brett, I correctly predicted that  
the USSC would reverse the 9th Ckt (yet again!) on this one.  I don't  
think Brett believed me.  But here we are.

The Trinko reasoning is that antitrust is not the best venue for  
deciding access cases generally; the appropriate venue is regulation.   
If there are good public policy reasons for requiring access at  
regulated rates in a particular industry, then that industry should be  
regulated and access at regulated rates should be required.  If the  
industry is not regulated, then there is no duty to deal, and mandated  
access will not be required as a matter of antitrust.

If you want relief from what Brett and others see as an intolerable  
economic burden, then have your state/Federal legislature regulate the  
business and have the regulator mandate access.  But you will not get  
it in antitrust court.

Transparency: I (together with many economists) signed an amicus brief  
to the USSC favoring rejection of the price squeeze argument in  
antitrust for industries without a duty to serve.  The brief is  
available at SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1264103 
 ,

Professor Gerald Faulhaber Emeritus
Wharton School, Univ of Pennsylvania
Law School, Univ of Pennsylvania

----- Original Message ----- From: "David Farber" <dave () farber net>
To: "ip" <ip () v2 listbox com>
Sent: Wednesday, February 25, 2009 7:33 PM
Subject: [IP] Re: Tough break, Brett (and the rest of us)


> Begin forwarded message:
>
> From: Brett Glass <brett () lariat net>
> Date: February 25, 2009 6:54:46 PM EST
> To: Randall Webmail <rvh40 () insightbb com>
> Cc: dewayne () warpspeed com, dave () farber net
> Subject: Re: Tough break, Brett (and the rest of us)
>
> In other words, they've refused to reverse Trinko, even though it  
> was wrongly decided.
>
> The ILECs now have a monopoly that is not subject to basic antitrust  
> principles (including the essential facilities doctrine). Will they   
> now jack up the price of Internet bandwidth and backhauls to  
> strangle  all competition?
>
> --Brett Glass
>
>
>
>
>
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